[Appellants] Appellant 1 and 177 others (Attorneys Lee Kyung-woo and 1 other, counsel for the Appellants)
[Respondent] ○○ Apartment Residents' Representative Council (Attorney Yoo Cheol-gyun and 8 others of Cheonjiin Law Firm, counsel for the Respondent)
[Lower Court Decision] Seoul High Court Decision 98Ra305, dated January 11, 1999
[Order]
All of the appeals are dismissed.
[Reasoning]
The grounds for appeal are examined as follows.
1. Examining the terms of the entrustment and management contract concluded between the Respondent and Bohwa Enterprise Co., Ltd. (hereinafter "non-party Bohwa") on June 30, 1994, the contract was, in essence, an agreement whereby the Respondent entrusted the management of ○○ Apartment located at (address omitted), Gangnam-gu, Seoul, to non-party Bohwa, a housing management business operator, and non-party Bohwa was to perform the entrusted duties at its own responsibility using its own employees, at the expense of the apartment residents, in return for a management fee of 30 won per pyeong. Even though the contract contains provisions, as asserted in the grounds for appeal, requiring the Respondent's approval of the organization and personnel of the apartment management office to be established by non-party Bohwa, requiring the Respondent's consent or approval for the appointment of each employee, the payment of employees' salaries and retirement benefits, the imposition of management fees, and all expenditures, requiring immediate compliance with the Respondent's request for dismissal of employees, and requiring monthly reports on matters concerning expenditure execution and fund management, this does not mean that the contract was merely a nominal entrustment and management contract, or that the Respondent, in substance, exercised personnel authority and the right to direct and command the work of the employees working at the apartment management office.
The lower court's determination to the same effect is justified, and there is no error of misapprehension of the legal principles concerning the interpretation of contract terms. Therefore, the argument in the grounds for appeal on this point is without merit.
2. Even if the Respondent was involved in the appointment of the head of the management office of this apartment complex in the manner alleged in the grounds for appeal, it is clear from the record that the head of the management office was, in status, an employee belonging to non-party Bohwa and an agent of non-party Bohwa who was granted the authority to oversee the overall work of the apartment management office in performing the entrusted management duties. The Appellants, who were hired under employment contracts concluded with the head of the management office and came to work at the management office, must be regarded as employees of non-party Bohwa. In order for the Respondent, who merely concluded the entrustment and management contract with non-party Bohwa, to be recognized as the employer bearing the obligation to pay wages to these Appellants, it must be found that the employment contracts concluded by the Appellants with the head of the management office as the counterparty were merely formal and nominal, that the Appellants, in a de facto subordinate relationship with the Respondent, provided labor to the Respondent, and that the Respondent paid wages in return for such labor, and other such circumstances, such that at least an implied employment relationship between the Appellants and the Respondent can be found to have been established (see Supreme Court Decision 72Da895, decided November 14, 1972; Supreme Court Decision 96Nu1504, decided June 11, 1996, etc.).
According to the record, it can be seen that the Respondent resolved on matters such as the hiring for the new position of technical manager at the management office, the withholding of new employee hiring, and the promotion of the management section chief, management supervisor, or security team leader; that the chairman and executives, as representatives of the Respondent, participated in interviews for the hiring of some new employees and the promotion of the security team leader; that the Respondent's representative also commended employees at the end of the year; that the Respondent approved documents drafted by the management office concerning new employee hiring, re-appointment of contract employees, handling of retirees, internal personnel appointments, and payment of wages, lunch and night meal allowances, other welfare expenses, and retirement benefits; that the Respondent received reports from the management office on fund execution and operation plans, work plans, and work performance; that the Respondent sent work directives to the head of the management office or notified him of matters resolved at monthly meetings; and that the Respondent was the counterparty in wage negotiations with the labor union to which the Appellants belonged, and determined the amount of employees' wages, welfare expenses, etc.
However, on the other hand, considering Article 3, Paragraph 1, Article 10, Paragraph 6, and Article 15, Paragraph 1 of the Multi-Family Housing Management Order (공동주택관리령) together, the management business operator is to collect management fees from the residents, as necessary for management duties in accordance with what is determined by the residents' representative council, including personnel expenses such as employees' salaries and retirement benefits, as well as various administrative expenses and uniform costs, and, in addition to maintaining and repairing the multi-family housing subject to management, its auxiliary facilities, welfare facilities, and various equipment, and managing safety, is to execute matters determined by the residents' representative council. According to the entrustment and management contract in this case, the Respondent entrusted non-party Bohwa not only with the collection of management fees but also with the deposit and use of management fees, without making any separate agreement on the limit or amount of expenses necessary for the entrusted management duties. Therefore, non-party Bohwa, as a mandatary, naturally owes a duty to report to the Respondent on matters concerning the execution status and operation of the deposited management fees, including monthly expenditures for entrusted business expenses such as employees' wages, welfare expenses, and retirement benefits. Furthermore, examining the record, it can be seen that the hiring of new employees and the promotion of employees are matters requiring additional burden of personnel expenses, the necessity for which is raised by the head of the management office, and the final decision is not always made solely by the Respondent's will. In particular, the Respondent's resolutions concerning the promotion of the security team leader and the withholding of new employee hiring, and its participation in the selection of the security team leader, occurred after doubts were raised as to the qualifications of the person to be promoted as a result of an audit, leading to a process of reselecting the relevant person, and after issues arose concerning excessive payment of wages and retirement benefits by the management office. Most of the draft documents from the management office approved by the Respondent's representative concerned matters related to management fees, and the work directives were merely matters reported or suggested by the residents. Meanwhile, it can also be seen that the representative director of non-party Bohwa and the head of the management office each carried out employee commendations; that the head of the management office regulated employees' service order pursuant to the rules of employment drafted by him, and supervised employees' assignment, work shift organization, and the specific performance of employees' duties; that he withdrew management fees and directly paid wages to employees; that the Respondent merely requested the head of the management office to take disciplinary action against employees; that the head of the management office registered as a business operator under his own name and paid industrial accident compensation insurance premiums, medical insurance premiums, and national pension contributions for the employees, thereby acting as the business operator for the employees in relation to industrial accident compensation insurance, medical insurance, and the national pension; and that he concluded collective agreements with the labor union on behalf of non-party Bohwa.
Considering the entrustment and management contract in this case together with all of the above circumstances, it is acknowledged that the Respondent went beyond the scope of supervisory authority based on its status under the entrustment and management contract by being involved in the hiring and promotion of some employees or by supervising the state of performance of the management office's duties, and by independently determining the level of payment of the Appellants' working conditions such as wages and welfare expenses. However, it cannot be said that the personnel authority, including the authority to appoint, dismiss, discipline, and assign, and the right to direct and command work, which non-party Bohwa or the head of the management office acting as its agent held over the Appellants as a party to the employment contract, were entirely excluded or rendered nominal, such that the employment contracts concluded with the Appellants were merely formal. Nor can it be said that the Respondent determined the content of the Appellants' duties and exercised specific and individual direction and supervision in the course of the performance of such duties. Therefore, it cannot be said that the Respondent is the employer in an employment relationship with the Appellants.
Accordingly, the lower court's conclusion that the Respondent could not be found to have substantially directed and supervised the Appellants to the extent that the Respondent could be regarded as the Appellants' employer is justified. However, the lower court's finding that a collective agreement was concluded every year, as asserted in the grounds for appeal, and its conclusion that all of the Respondent's actions described above constituted the exercise of supervisory authority, were erroneous; however, this error cannot be deemed an illegality affecting the lower court's decision. Furthermore, there is no other illegality, such as misapprehension of the legal principles concerning employment relationships, as asserted in the grounds for appeal. Therefore, the argument in the grounds for appeal on this point is also without merit.
3. Accordingly, all Justices participating in the deliberation unanimously agree to dismiss all of the appeals, and it is so decided as set forth in the Order.
Justice Cho Mu-je (Presiding Justice), Jeong Gwi-ho, Kim Hyeong-seon (Justice in charge), Lee Yong-hun